Innovation News

Washington DC - Poor college completion rates in America are not “new,” nor are they the fault of one political party or presidential administration. College attainment is a complex process with many institutional actors, types of students, and outside entities. Crafting federal and state policies to raise college completion rates may be an equally complex process, as Sarah Turner notes in this report, but it need not be a partisan battle. A key challenge for higher education reformers is using policy to raise completion rates while avoiding the unintended consequences that top-down reform invites. Clumsy or ill-conceived policy is fraught with perverse incentives for students and college administrators, who could become inclined to “game the system” without meaningfully raising the level of educational attainment in America.

With that caution in mind, Turner reviews a series of potential policy options to improve completion rates. One of the most common themes across higher education research is that money matters, but how our limited public resources should be spent is less clear-cut. One approach, used across 32 states, ties a portion of public subsidies to completion rates, with the most successful institutions receiving a larger share of public funding. However, it is uncertain how performance-based funding policies affect overall completion rates since these policies might simply encourage some schools to generate low-quality degrees or only admit the most academically prepared students in the first place. As Turner explains, a better approach incorporates multiple outcome metrics in performance-based funding formulas, which can lessen the incentives for institutions to distort behavior to a single output measurement.

For details: http://www.aei.org/publication/the-policy-imperative-policy-tools-should-create-incentives-for-college-completion/​